Phone calls, and text messages are among the various forms of fraud on this list that are aimed at taxpayers.
The IRS has informed taxpayers of the following in order to prevent tax fraud in 2022:
The nature of each of these scams and the potential tax consequences of using them are discussed in detail in Optima Tax Relief. Arrangements for Malta’s pensions based on a treaty Insurance for captives in Puerto Rico. installment sales monetized. The IRS recently released the “Dirty Dozen” list of tax frauds for this year, which includes some new entries. Phishing emails, phone calls, text messages, and other forms of fraud that target taxpayers are on the list.
Abuse of the Treaty: Maltese Pension Plans Contributions to foreign retirement accounts in Malta and other nations that allow non-cash contributions or do not limit the number of contributions that can be made have been used by some taxpayers to avoid paying taxes. This becomes a problem when taxpayers misrepresent the foreign arrangement as a pension fund for the purposes of the U.S. tax treatment. They are then able to guarantee an exemption from both the conveyances from the record and the personal expenses incurred as a result of the record.
The Maltese annuity plans should be improved because they are a reasonable abuse of the deal framework. Through the current Maltese pension system, wealthy individuals can invest in foreign real estate and other assets.
This protects the individual’s funds from taxation, which is beneficial, but it does nothing for Malta’s citizens. To put an end to this harmful practice, the government must close this loophole. At that point, the Maltese people will finally be able to take advantage of the pension system, which will only be able to function as intended.
Insurance for Captives in Puerto Rico: In this transaction, a U.S. taxpayer deducts insurance costs. The issue is that this insurance is given by a fronting transporter that reinsures the contract with an unfamiliar organization. The fronting carrier basically rents its license to the taxpayer because there is no actual risk.
Monetized Installment Sales In monetized installment sales, a seller will agree to sell appreciated property to a buyer for cash. The seller then states that they will sell the same property to a third party in exchange for an installment note. After that, the third party asserts that it received the cash for the purchase and sold the property to the buyer. The issue is that the seller receives a sum that is very close to the sale price without having to pay any transactional fees in a nonrecourse, unsecured loan.
The IRS strongly recommends that any taxpayer who has engaged in the aforementioned activities file an amended return and even seek tax advice. If you don’t, you could be fined or even charged with fraud.
However, there are also scams targeting sole proprietorships and small businesses on this year’s list. One example of this kind of fraud is the “ghost preparer” scam, in which a tax preparer promises a large refund without ever seeing the taxpayer’s financial information. Another common type of fraud is the “phishing” scam, in which the IRS sends fictitious emails or text messages to taxpayers asking for personal information. The best way to avoid these scams is to be aware of them and be cautious when providing personal information to anyone claiming to be from the IRS. If you have any doubts about the legitimacy of the communication you have received, you can always call the IRS directly.
